Newspatrolling.com News cum Content Syndication Portal Online
• Strong start to 2025: PE/VC investments increase 37% m-o-m in January, despite a dip from January 2023
• Exits slow down: January 2025 sees a 48% decline in exits compared to December 2024
• Declining interest rate curve in 2025 could drive uptick in PE/VC investments in infrastructure and real estate
Mumbai, 11 February 2025: EY released its latest edition of the ‘PE/VC Agenda: India Trend Book 2024’, at the Indian Venture and Alternate Capital Association (IVCA) in Mumbai, highlighting a strong year for private equity and venture capital deal activity in India. Despite global challenges, 2024 marked the second highest-ever investments of US$56 billion, driven by an all-time high in deal volume, with 1,352 deals—a 54% year-on-year surge. This growth demonstrates India’s resilient economic framework, the increasing depth of its capital markets, long term growth potential of sectors investors find attractive and an expanding and resilient startup ecosystem.
Vivek Soni, Partner and National Leader for Private Equity Services, EY India said, “Despite the backdrop of geopolitical uncertainties, depreciating currency, stretched valuations and market volatility, the resilience of India’s economic expansion has driven an increase in PE/VC activity. The 2024 PE/VC activity—marked by rising investment volumes and exits—underlines investor confidence in India’s growth trajectory, with sectors like infrastructure, real estate, e-commerce, technology, and financial services leading the way. As we navigate the challenges and uncertainties that will come our way in 2025, our GDP growth, political and policy stability, favorable macroeconomic environment and the quality of Indian entrepreneurs will continue to offer significant opportunities for long term investors. The declining interest rate curve combined with correction in public market valuations will hopefully reduce the bid-ask spread in private deals and lead to increase in value and volume of PE/VC deal closures. ”
Commenting on the launch of the report, Rajat Tandon, President, IVCA said, “India’s alternate capital landscape has matured significantly over the past decade, demonstrating resilience and adaptability amid evolving global dynamics. The surge in buyout transactions and private credit investments signals a shift towards long-term value creation and strategic growth. At the same time, the rise of new sectors—driven by innovation and sustainability—underscores the expanding horizon of investment opportunities. As capital markets evolve and exit strategies become more sophisticated, India continues to solidify its position as a global investment hub. The road ahead will be shaped by collaboration, policy certainty, and the ability to harness emerging opportunities in a rapidly changing world.”
Key trends of 2024
1. Overall rise in investments: PE/VC investments saw a 5% year-on-year increase in 2024, driven by a surge in buyout investments, particularly in the infrastructure, technology, and financial services sectors. The number of deals experienced a
significant 54% year-on-year growth. While buyout, start-ups and credit segment
experienced an increase in value terms, growth and PIPE investments declined
compared to the previous year.
2. Shift in investment approach: A resurgence was observed in pure-play PE/VC investments, which saw a 10% year-on-year increase. PE/VC activity in the infrastructure and real estate asset class declined by 3% year-on-year.
3. Churn in sectoral allocation: Infrastructure was the leading sector, attracting US$12.1 billion in PE/VC investments. Among the traditional favorites, financial services, e-commerce, and technology recorded a growth, whereas life sciences experienced a year-on-year decline. The real estate sector witnessed a record high of US$8.8 billion in investments.
4. PE/VC exits rise: PE/VC exits surged to a record third-highest total of US$26.7 billion, across the second highest-ever number of exits, with 282 deals. Exits via the open market dominated this year’s exit activity with an all-time high of US$12.9 billion, accounting for 48% of overall exits during the year.
5. Decline in fundraising activity: Fundraising activity declined in 2024 to reach US$10.4 billion, down from US$15.9 billion in the previous year. The number of fundraises also dropped to 95 from an all-time high of 102 in 2023.
PE/VC Investments by Sector
In 2024, private equity and venture capital investment activity exhibited significant trends
across various sectors. Infrastructure, financial services, real estate, e-commerce, technology and life science recorded more than 100 deals each, compared to just two sectors reaching this milestone in 2023, collectively accounting for 80% of total
investments by value and 66% by deal volume. Like last year, 2024 also witnessed 12 sectors receiving over US$1 billion in investments.
The infrastructure sector maintained its dominance and, as in the previous year, remained the top sector in this year. In 2024, the real estate and financial sectors swapped positions. Real estate, which held the second spot in 2023, slid to third, while the financial sector moved up from third to secure the second spot. The technology sector, previously ranked fifth in 2023, moved to the fourth spot.
Traditionally favored sectors such as e-commerce, technology, and financial services grew by 87%, 56%, and 41%, respectively. Meanwhile, sectors like telecommunications, chemicals, and media and entertainment experienced exceptional growth of 711%, 472%, and 108%, each surpassing the 100% growth mark. These dynamics underscore the evolving landscape of PE/VC investments, reflecting shifts in investor preferences as per the market dynamics.
Eying the Future: Positive outlook for 2025 and beyond
PE/VC investments in 2025 began on a strong note, with January’s investments 37% higher than December 2024, despite a 9% dip compared to January 2024. The outlook for India’s PE/VC ecosystem remains positive, driven by a favorable macroeconomic environment, strong fiscal health, and stable government policies. As volatility in mid-cap and small-cap indices declines, we anticipate increased deal activity and closures.
The recent market correction signals more balanced conditions ahead, reinforcing India’s attractiveness as a leading PE/VC destination. International General Partners (GPs) will continue to shape the landscape, while the pullback in the startup segment presents unique opportunities, particularly in Tier 2 and Tier 3 cities, known for their untapped markets and cost advantages.
With improving corporate earnings, a narrowing gap between buyer and seller expectations, and an increasing number of IPOs, India offers substantial opportunities to PE/VC investors. Sectors like Infrastructure, Real Estate, Financial Services, Technology, E Commerce, Healthcare combined with opportunities in Green Energy Transition and Renewables, healthcare and pharmaceuticals will continue to attract PE/VC investor interest
